Sunday 29 January 2012 07.04 EST
First published on Sunday 29 January 2012 07.04 EST

The work and pensions secretary, Iain Duncan Smith, has said Britain would block eurozone countries from using institutions paid for by EU nations.

Pressed on the possible use of the European commission and courts, which are funded by EU countries, in the push for deeper fiscal and political union among the 17 single currency members states, Duncan Smith said the prime minister had vetoed "any such possibility".

The former Tory leader insisted he had absolute "trust" in David Cameron to stick to the veto, amid mounting speculation the prime minister has rowed back on the pledge ahead of Monday's EU summit.

"The prime minister made it very clear at the last summit that the UK was not going to play a part in their treaty, we were not going to be involved in it and we did not want it to damage the single market or our own banking structures or financial structures," Duncan Smith told BBC1's Andrew Marr Show.

"I wouldn't let speculation go too far. The fact is the prime minister vetoed them using the institutions and he has always said that veto was because we had no guarantees that what they are proposing would not damage the single market, or for that matter, would actually cause problems for the financial sector.

"We don't know what they are coming forward with yet. They still haven't completed their treaty and they aren't anywhere near signing and we don't know that everybody will go down that road with them."

He added: "The prime minister has already made it clear about that because he vetoed any such possibility of that happening.

"I absolutely trust the prime minister on this, I know where he stands. He stands on the basis that we must protect the single market, we want them to get their economies sorted out because that's causing us problems over here but we do not want them thrashing around the very thing that we set up, which was the access to the marketplace and the free flow of capital in the financial sector."

Duncan Smith warned against "fiddling around" with democracy following Saturday's leak of German proposals for an EU budget commissioner with veto powers over Greek taxes and spending.

The Greek government dismissed the plans and vowed to stay in control of its own budget.

Duncan Smith said: "You need to be very careful about how you deal with sovereign states and their ability to govern themselves and I know the prime minister has said this to them and I think as one of the great historical democratic nations, we should always stand up for democratic freedoms all over Europe. After all, lack of democratic freedoms is what caused the second world war."